Have you ever read the history of LoopNet on Wikipedia? Did you know that its core business principles are and always have been “connecting sellers with buyers over an open and free (emphasis is mine) network.”
There’s more. A glowing case study of LoopNet’s startup model states that LoopNet’s founder envisioned a partnership of brokers that would consolidate the fractured CRE data market. This “partnership” became a reality thanks to the founder’s persistence in leveraging and nurturing a relationship with the commercial brokerage community. As a result, LoopNet is a model for how collaboration and cooperation can create a successful user generated data site.
The cooperation/collaboration with brokerages? It may have started out that way but then things changed. Someone had to pay for all that data aggregation and agents shouldn’t expect to get the benefits of that for nothing. It wouldn’t be so bad to pay a submission fee if search were free at least. But LoopNet wanted to hit up those buyers too. Somehow residential aggregators can make money without charging for search. Either LoopNet couldn’t or didn’t try.
If only LoopNet could have figured out how to make money without biting the hands that fed them. Or at least come up with something fairer. Like these new sites that get paid for performance. If you put your listing on one and you get a deal out of it, the site gets a cut of the commission. Or even a pay per click model like some of the residential aggregators use. The agent pays only when their listing is viewed. But those options would have been messier than a subscription model where you have a steady flow of income no matter how good/bad the market is.
The worst part of the whole story is that LoopNet could have really become a force in CRE if it had truly partnered with brokers. What if they had offered a small share of the business to their agent partners and charged an annual participation fee? What if LoopNet had worked with brokers to come up with standardized data formats and easy data exchange? What if LoopNet had thought to do what CompStak is doing – before they did. Yeah, they had those crowd sourced properties, but if they had asked
their partners agents, they would have found out that comps were more valuable.
All these missed opportunities. Their original vision – just a bunch of words. And now CoStar owns them. Some people made out really well – but it wasn’t any of their partners in the brokerage community.